1
Exhibit 2.7
ASSET PURCHASE AGREEMENT
Agreement made this 16th day of September 1998 between GLOBAL
ENTREPRENEURS NETWORK, INC., a Florida corporation, having an office at 1000 000
X. Xxxxxx Xxxx, Xx. Xxxxxxxxxx, Xxxxxxx (the "Seller") and SAGE NETWORKS
ACQUISITION CORP., a Delaware corporation, having an office at 000 Xxxxx Xxxxxx,
Xxxxxxxxx, XX (the "Buyer").
W I T N E S S E T H:
WHEREAS, Seller is a wholly owned subsidiary of GEN International,
Inc. ("GEN") which is, concurrently with the execution of this Agreement,
entering into an agreement with the Buyer for the sale by GEN and the purchase
by Buyer of GEN's Internet web hosting business and substantially all the
operating assets of GEN related to said business; and
WHEREAS, Seller conveyed to GEN its GEN Membership Accounts and any
and all of it's rights to GEN Trade Marks, the GEN Logo(s) and any rights
arising directly or indirectly from the GEN name (collectively, the "GEN
Assets") pursuant to an agreement of sale dated June 9, 1997 (the "Agreement of
Sale"), a copy of which is attached hereto as Exhibit A; and
WHEREAS, after the sale to GEN pursuant to the Agreement of Sale,
Seller continued to be the lessee under certain equipment leases covering
equipment (the "Leased Equipment") used in connection with GEN's Internet web
hosting business, which leases are listed on Exhibit B attached hereto (the
"Equipment Leases"); and
WHEREAS, after the sale to GEN pursuant to the Agreement of Sale,
Seller continued to own certain equipment (the "Owned Equipment") used in
connection with GEN's Internet web hosting business, which equipment is listed
on Exhibit B-1 attached hereto (the Leased Equipment and the Owned Equipment is
collectively referred to as the "Equipment"); and
WHEREAS, Seller is currently the Debtor in a bankruptcy proceeding
in the United States Bankruptcy Court for the Middle District of Florida, Tampa
Division, docket No. 98-8645 8B1 (the "Bankruptcy Court"); and
WHEREAS, Buyer desires to acquire (i) ownership of the Equipment and
(ii) all right, title and interest that Seller may have in and to the assets
transferred to GEN pursuant to the Agreement of Sale.
NOW THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement, the parties agree as follows:
2
1. Seller agrees to sell, convey and assign to Buyer free and clear
of all liens, leasehold interests and encumbrances of any kind whatsoever, all
of Seller's right, title and interest in and to (i) the Equipment and (ii) all
of the assets transferred by Seller to GEN pursuant to the Agreement of Sale,
including without limitation, the GEN Assets (collectively, the "Purchased
Assets").
2. The purchase price for the Purchased Assets is Two Hundred
Ninety-Five Thousand ($295,000.00) Dollars (the "Purchase Price").
3. Seller agrees to execute and deliver to McCarthy, Fingar,
Xxxxxxx, Xxxxxx & Xxxxx, L.L.P., 00 Xxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx
00000, as escrow agent (the "Escrow Agent") on the date hereof a xxxx of sale
and assignment satisfactory to Buyer (the "Xxxx of Sale") conveying to Buyer all
its right, title and interest in and to (i) the Purchased Assets free and clear
of all liens, leasehold interests and encumbrances of any kind whatsoever and
(ii) all claims and/or causes of action which Seller may have for recovery of
the Purchased Assets or the value thereof from GEN under Title 11 of the
Bankruptcy Code or any applicable non-bankruptcy law or cause of action.
4. Buyer agrees to deliver to the Escrow Agent by September 17, 1998
the amount of $295,000.00 by wire transfer. The Escrow Agent agrees to hold such
funds in an escrow account maintained by it at a bank located in Westchester
County, New York.
5. The Escrow Agent agrees to hold the Xxxx of Sale and said
$295,000.00 in escrow until such time as it receives (a) a verified, final, and
non-appealable order from the Bankruptcy Court in form and substance
satisfactory to Buyer and its counsel, whereby the Bankruptcy Court (i) makes a
finding that the Buyer is a good faith purchaser for value of the Purchased
Assets under Section 363 (m) of the Bankruptcy Code and (ii) it approves the
sale and conveyance of the Purchased Assets to Buyer pursuant to this Agreement
and (b) a copy of a xxxx of sale from the lessors of the Equipment to the Buyer,
or such other proof satisfactory to Buyer that Seller is vested with good and
marketable title to the Equipment. Upon receipt of said order and xxxx of sale
from the lessors (or other proof of title), the Escrow Agent shall deliver the
Xxxx of Sale to the Buyer and transmit the $295,000.00 to the Seller or the
Bankruptcy Court as instructed by the Bankruptcy Court. Notwithstanding the
foregoing, if directed by the Buyer in Buyer's sole discretion, Escrow Agent
shall pay such portion of the Purchase Price as is necessary to obtain title to
the Purchased Assets, including the Equipment free and clear of all liens,
leasehold interests and encumbrances directly to the creditors of the Seller,
including any lessors of the Leased Equipment.
6. Notwithstanding that the Xxxx of Sale will be held in escrow
pursuant to paragraph 5 of this Agreement, Buyer may immediately upon execution
of this Agreement, move and transfer the Purchased Assets, including the
Equipment, to its data center located in Atlanta, Georgia and use them in the
business of Buyer or of Buyer's successors and/or assigns.
7. Seller hereby represents and warrants that attached hereto as
Exhibit C is a true and correct schedule of the payoff amounts relating to the
Equipment Leases.
-2-
3
8. Escrow Agent assumes no liabilities under this Agreement except
that of a stakeholder. The duties of Escrow Agent are only such as are
specifically provided in this Agreement, being purely ministerial in nature, and
no implied duties or obligations may be read into this Agreement against Escrow
Agent. The Escrow Agent (a) shall not be liable for any error of judgment, any
mistake of fact or law or any act done or omitted by it in good faith, unless as
the result of its gross negligence or willful misconduct; (b) shall be entitled
to treat as genuine any letter or other document furnished to it by Seller or
Buyer and believed by it to be genuine and to have been signed and presented by
the proper party or parties; (c) shall be entitled to consult with counsel of
its own choosing with respect to any matter that arises hereunder and shall not
be liable for action taken or omitted to be taken by it in good faith, and in
accordance with the advise of such counsel; (d) shall be indemnified and held
harmless by Buyer and Seller, jointly and severally, against any and all
damages, expenses and liabilities incurred by it hereunder, including attorneys'
fees and costs, except for those incurred by it as a result of its own willful
misconduct or negligence, (e) in the event that a dispute shall arise as to the
disposition of the items held in escrow hereunder, Escrow Agent shall have the
right, at its option, to either hold the same or deposit the same with a court
of competent jurisdiction located in the County and State of New York pending
decision of such court, and Escrow Agent shall be entitled to rely upon the
decision of such court, and (f) notwithstanding any dispute concerning the items
held in escrow hereunder, Escrow Agent may represent Buyer as Buyer's legal
counsel in any matter, including such dispute.
9. Seller agrees to use the Purchase Price to pay to creditors of
the Seller, including without limitation the lessors under the Equipment Leases,
such amount as is necessary to obtain title to the Equipment, free and clear of
all liens, leasehold interests and encumbrances of any kind whatsoever.
10. The parties agree that if the order of the Bankruptcy Court is
not delivered to the Escrow Agent by December 31, 1998 then this Agreement shall
be null and void and the Escrow Agent shall be and is hereby directed by the
parties to return the $295,000.00 to the Buyer and to return the Xxxx of Sale to
the Seller.
11. Seller shall reasonably cooperate and provide assistance to the
Buyer as shall be reasonably appropriate during the transition of the Purchased
Assets from the Seller to the Buyer, or its successors and/or assigns, after the
Closing Date. All assistance shall be made promptly when available after any
request by Buyer. Buyer shall only reimburse the Seller for reasonable
out-of-pocket expenses incurred in rendering such assistance, but not for any
time of any personnel.
12. Notwithstanding any other provision of this Agreement, unless
and until a final, nonappealable order is entered by the Bankruptcy Court
meeting the requirements of Section 5 of this Agreement, neither the Seller nor
the Global bankrupt estate, nor any third party, shall have any interest in the
amount being held by the Escrow Agent pursuant to this Agreement.
-3-
4
13. Seller will, at any time and from time to time after the Closing
Date, execute and deliver such further instruments of conveyance, transfer and
license, and take such additional actions as Buyer, or its successor and/or
assigns, may reasonably request, to effect, consummate, confirm or evidence the
transfer to Buyer of the Purchased Assets pursuant to this Agreement
14. This Agreement shall be governed by the laws of the State of New
York. The parties hereto submit and consent to the exclusive jurisdiction of the
state courts of the State of New York in the Counties of New York and/or
Westchester and the federal courts located therein with respect to any legal
actions relating to this Agreement.
15. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument.
16. This Agreement supersedes any prior contracts relating to the
subject matter hereof between the Buyer and the Seller. This Agreement cannot be
changed, modified or amended and no provision or requirement hereof may be
waived without the consent in writing of the parties hereto.
17. This Agreement is binding upon and inures to the benefit of the
parties, their successors and permitted assigns. This Agreement may not be
assigned or the duties of the parties hereunder delegated to others without the
prior written consent of all parties hereto.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the date first above written.
GLOBAL ENTREPRENEURS NETWORK, INC.
By /s/ Xxxxxx Xxxxxxx
--------------------------------
Xxxxxx Xxxxxxx, President
SAGE NETWORKS ACQUISITION CORP.
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx, President
Agreed to:
MCCARTHY, FINGAR, XXXXXXX, XXXXXX & XXXXX, L.L.P.
By /s/ Xxxxxx Xxxxxxx
-------------------------------
-4-
